Kjell Group AB (publ) Just Missed EPS By 65%: Here's What Analysts Think Will Happen Next

Shareholders in Kjell Group AB (publ) (STO:KJELL) had a terrible week, as shares crashed 30% to kr20.00 in the week since its latest annual results. Statutory earnings per share fell badly short of expectations, coming in at kr0.40, some 65% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at kr2.6b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Kjell Group

Taking into account the latest results, the most recent consensus for Kjell Group from two analysts is for revenues of kr2.64b in 2024. If met, it would imply an okay 3.1% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 327% to kr1.70. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr2.72b and earnings per share (EPS) of kr2.26 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 17% to kr28.50.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Kjell Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.1% growth on an annualised basis. This is compared to a historical growth rate of 8.8% over the past five years. Compare this to the 26 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 3.7% per year. So it's pretty clear that, while Kjell Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Kjell Group's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Even so, be aware that Kjell Group is showing 3 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.